Tag Archives: Pessimism

Eurozone investor morale improves in September, inspired by Mario Draghi

Mario Draghi started a new round of QE. Again. Last time, he said he had a bazooka, but that bazooka was obviously not powerful enough. He have also previously said that he will do everything he can to boost the market again. In addition to his QE program, he also lowered the deposit interest rate.

You can borrow money in your bank and your bank will pay you money for that. Isn`t that funny? Did someone say something about «free lunch?» You cannot find cheaper money at moment and that will make people borrow more money. The strategy is to boost the economy and create a level of optimism.

In the Euro Area, the ZEW Economic Sentiment Index measures the level of optimism that analysts have about the expected economic developments over the next six months. The optimism isn`t sky high, but it isn`t deeply low either.

The ZEW indicator rose by 21,2 points in September 2019. It was expectation of -32,2 in September but it came in at -22,4 this month. The servey covers up to 350 financial and economic analysts and 47,4 percent of the surveyed analysts expected no changes in economic activity and 15,1 percent expected it to improve while 37,5 percent predicted a deterioration in economic condition.

The index reached an all time low of -63,70 in July of 2008. (-100 means all analysts expect the economy to deteriorate). Right before the dot-com-bubble in January of 2000, the index reached an all time high of 89,90.

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